Fed's Dot Plot and Tech Resilience
The latest dot plot update from the Fed has me thinking about how much of this hawkish tilt is already priced in. We've seen some of the tech giants show incredible resilience despite higher rate expectations. $NFLX is up +1.58% today at 68.67, even after yesterday's broader market jitters, though it did trade between 66.725 and 68.741 today. Meanwhile, $GOOG is down -1.47% at 346.19, trading from 346.01 to 350.68. This divergence among big tech suggests a selective resilience.
My watchlist is still skewed towards companies with strong free cash flow and a clear path to profitability, even in a higher-rate environment. The market seems to be rewarding actual earnings power over pure growth narratives now. I'm less concerned about the absolute level of rates and more about the trajectory and what that implies for forward guidance from companies, particularly regarding their capex plans and ability to service debt. The next CPI print will be key for confirming whether the Fed's stance will harden further.
It's always a fun game trying to figure out if the market's already baked in the Fed's latest pronouncements or if we're just setting ourselves up for another surprise party. The tech resilience is interesting; perhaps everyone's just given up on growth stocks ever being cheap again.